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Friday, December 31, 2010

Chatting Messenger

Frank and I discuss a few stories from around the web that caught our interest. Let us know what you think!

Frank: Saw this neat video on gold the other day.Saj: I love how it's both a deflation and inflation hedge. Magical!Frank: Just have faith!Saj: Of course, ever the contrarian, Warren Buffett doesn't like gold:You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?Frank: Of course you want the cube!Saj: Yeah, you can't store 10 Exxon's in an underground vault!Frank: And seriously, what are you going to do with $1 trillion in cash at today's highly inflated prices? Give me that in gold and you've got yourself a deal!Saj: Why don't gold miners just pay their dividends in gold instead of cash? Don't they know their investors are just buying more gold with it anyway?Frank: The investors still need the paper currency to heat their houses when Armageddon arrives.

Saj: I love how Netflix continues to buy back shares even though its P/E is at 70.Frank: Great use of corporate cash!Saj: They would have liked to buy shares of Amazon instead, but Amazon's P/E, at 73, was just too pricey.Frank: Thank God for relative valuation techniques!Saj: Yeah, that just saved them from a huge mistake! Phew!

Frank: It looks like the cash-strapped Ontario government is getting into the online gambling business.The OLG estimates that Ontarians spend approximately $400 million each year in unregulated online gambling — with none of that money entering government coffers through taxation or fees. "In its current form, internet gaming in Ontario does not return proceeds to this province," said Godfrey.Saj: The "current form" being: you're not allowed to start a gaming company as a private citizen.Frank: "But we can, cause we're the government!"Saj: Why stop at gaming? Frank:Yeah, what about all the cocaine money that leaves Ontario?Saj: Resulting in no taxes and jobs for the good people of Ontario!Frank: Or why not just let the private sector do it, and then regulate it?Saj: They don't like that model. "In other news, the Ontario government is going to set up its own airline."Frank: "Yeah, we know we *could* have the private sector run airlines and then just regulate them for safety and tax their profits"Saj: "But we'd rather just profit from a legislated monopoly instead."Frank: Who ends up paying for the higher costs associated with monopolies? The addicted gamblers of course, whom the government is "protecting" with this legislation.